These 3 technological stocks are building the future
When considering which tech stock will produce the highest returns, it’s best to invest in innovative companies that will be major players in the coming decades rather than the next few quarters. Amazon (AMZN -0.54%), Apple (AAPL -0.66%)and Microsoft (MSFT -0.97%) have undoubtedly changed technology as we know it, founded by leaders with a keen eye on the future.
As a result, these companies continue to produce groundbreaking products and services and will likely do so for years to come. Here’s why.
Amazon revolutionized e-commerce when it was founded in 1994, starting with selling music and videos, then quickly moving on to books and hundreds of other products. The company then shook up the industry again with the launch of Amazon Prime in 2005. The subscription service has amassed 163.5 million US users, or about 49% of the population.
Amazon has earned a reputation for disrupting well-established industries with superior technology and aggressive investment. His adventure in books led him to tackle publishers and booksellers around the world, offering a cheaper and faster way to buy literature. Then it took sony, Apple and Samsung with its release of e-readers and tablets. Its recent acquisitions of A medical and i robot could see Amazon do the same in the healthcare and consumer robotics sectors.
Additionally, Amazon Web Services (AWS) has become a cloud computing titan, with a dominating 34% market share in a $203.5 billion industry. Launched in 2006, AWS hosts applications and websites for businesses, universities, and government agencies around the world. As a result, AWS accounted for 13% of Amazon’s revenue in the last quarter of 2021 and 100% of its operating revenue.
Amazon has proven time and time again that it is a force to be reckoned with, regardless of industry. It will likely continue to grow and revolutionize the tech world for years to come.
Apple is arguably the most innovative company in the world, not necessarily by being the first to introduce a product, but because of its unique talent for reinventing technology and pushing it into the mainstream. In 2007, Apple launched the first iPhone, which catapulted smartphones into the stratosphere and inspired dozens of other tech companies to create similar devices. The tech giant did the same with the tablet when it introduced the iPad in 2010 and convinced millions of consumers to wear a smartwatch when it released the Apple Watch in 2016.
Moreover, Apple has developed a winning strategy with its products. Its ecosystem of interconnected devices provides ease of use for consumers and involves a model in which users are drawn deeper into its walled garden through a single product. For example, iPhone users are more likely to look for a MacBook when buying a laptop or an iPad when they need a tablet simply because the devices work so well together.
Since September 5, the iPhone has overtaken Android smartphones in the United States, reaching 50% market share for the first time. The achievement is positive for Apple because more iPhone users mean more people to attract to its other products.
Apple tends to keep tabs on its unannounced plans, but rumors have swirled that it plans to enter various other markets, such as virtual reality, electric vehicles and foldable phones. If the past is anything to go by, these industries will be markedly changed once Apple arrives.
Since the creation of Windows software in the 1980s, Microsoft has dominated the market for desktop computers and later laptops. Despite the best efforts of companies like Apple to win market share from Microsoft, the Windows maker has maintained an iron grip on the PC operating system market. Apple has used an aggressive strategy over the past decade, but Windows continues to account for more than 76% of the PC software market.
This number increases dramatically when it comes to games. Windows operating systems account for over 96% of the PC gaming market on the largest platform, Valve’s Steam.
In recent years, Microsoft has combined its Xbox console and Windows PC gaming businesses. Blurring the lines between the two led to considerable success with his netflix– as a game subscription service, Xbox Game Pass. The service is the most popular gaming subscription in the world, growing from 10 million members in 2020 to 25 million at the start of 2022.
As Microsoft aggressively acquires game developers and publishers, the company is in a unique position to lead the future of the gaming industry, much like Netflix did with the movie industry over the past the last decade. In addition, its project to acquire ActivisionBlizzard in 2023 will make it the third largest gaming company by revenue after Tencent and Sony and empower it to enact new changes in the industry.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Dany Cook has no position in the stocks mentioned. The Motley Fool occupies and recommends Activision Blizzard, Amazon, Apple, Microsoft, Netflix and Tencent Holdings. The Motley Fool recommends the following options: $120 long calls in March 2023 on Apple and short calls $130 in March 2023 on Apple. The Motley Fool has a disclosure policy.